On Friday the 21st of July, the euro/dollar pair rose to 1.1628 during the Asian session. As trading opened in Europe, traders hit a new daily high of 1.1677, beating yesterday’s 1.1659 maximum. It turned out that there weren’t any protective stop levels on short positions here. In the end, a sharp rebound from 0.8991 on the euro/pound cross forced buyers on our main pair down to 1.1636. The euro bulls were unable to break 1.17. It seems that short-term speculators have started cashing in on their positions in time for the weekend.
The US dollar index is trading down, and so the euro is falling reluctantly with the cross. The US dollar is falling against the kiwi, the loonie, yen, pound, and Swiss franc. The euro/pound has fallen below the 0.8956 support. If this slide gathers pace, the euro/dollar will first return to 1.1618. If it doesn’t stop there, the price will move to 1.1596. 1.1623 will act as an intermediary support here. The economic calendar is pretty much free of events today, so the euro/dollar could maintain its sideways trend until Monday.
The ECB has published its quarterly economic forecasts. Expected inflation for 2017, 2018 and 2019 has been revised downwards to 1.5%, 1.4% and 1.6% from the previous values of 1.6%, 1.5% and 1.7% respectively. GDP growth forecasts for 2017, 2018 and 2019 have been increased to 1.9%, 1.8% and 1.6% from their previous values of 1.7%, 1.6% and 1.5% respectively. Draghi will need to do something about this, or else with a rate of 1.18 or higher, the ECB won’t see inflation rise.